Question 1

How is redundancy pay calculated in the UK?

Accepted Answer

Statutory redundancy pay is based on your age during each full year of continuous service (counted backward from the relevant date, up to 20 years): 0.5 week's pay for each year under 22, 1 week for each year 22–40, and 1.5 weeks for each year 41+. Weekly pay is capped — £751 in Great Britain and £783 in Northern Ireland from 6 April 2026. The total is then capped at £22,530 (GB) or £23,490 (NI).

Question 2

Do I need 2 years' service to get redundancy pay?

Accepted Answer

Yes, in almost all cases statutory redundancy pay requires at least 2 years' continuous service as an employee by the relevant date. Some short-service cases involving payment in lieu of notice can push you over the 2-year mark — the calculator handles this when you tick the PILON option.

Question 3

Is redundancy pay taxed?

Accepted Answer

Statutory redundancy pay up to £30,000 is generally tax-free and not subject to National Insurance. Notice pay, holiday pay, unpaid wages, contractual bonuses and most enhanced redundancy elements may be taxed differently. The calculator shows statutory pay separately to keep this clear.

Question 4

Does notice pay count as redundancy pay?

Accepted Answer

No — notice pay is a separate entitlement from statutory redundancy pay. The calculator shows an estimated notice pay figure on its own panel, using your actual gross weekly pay (not the statutory cap) and the longer of statutory and contractual notice.

Question 5

What is the weekly pay cap?

Accepted Answer

From 6 April 2026 the statutory weekly pay cap is £751 in Great Britain and £783 in Northern Ireland. If your gross weekly pay is below the cap, your actual pay is used; if it is above, the cap is used for the statutory calculation.

Question 6

What is the maximum statutory redundancy payment?

Accepted Answer

From 6 April 2026 the maximum statutory redundancy payment is £22,530 in Great Britain and £23,490 in Northern Ireland. Even with 20 years of service at the cap and the highest age band, the total cannot exceed this maximum.

Question 7

Does age affect redundancy pay?

Accepted Answer

Yes. Each full year of service is multiplied by 0.5, 1.0 or 1.5 weeks depending on your age during that year. Workers aged 41 or older during a year of service get 1.5 weeks for that year, which is why redundancy payouts often grow significantly after 40.

Question 8

What happens if I'm offered another job?

Accepted Answer

If your employer offers suitable alternative employment and you unreasonably refuse it, you can lose your statutory redundancy pay. There is usually a 4-week trial period to try the new role without losing your entitlement. Whether an offer is 'suitable' and a refusal 'unreasonable' is fact-specific — get advice if unsure.

Question 9

What if I work variable hours?

Accepted Answer

For variable-hours workers, gross weekly pay is normally averaged over the 12 weeks before the redundancy notice was given. Use that average in the gross weekly pay field. Guaranteed overtime and contractual bonuses can be included in the calculation.

Question 10

What if I'm on maternity leave or another family-related leave?

Accepted Answer

Statutory redundancy pay must be based on your normal contractual gross weekly pay — not your reduced maternity, paternity, adoption or shared parental leave pay. Tick the family-related leave option and enter your normal pay.

Question 11

What if I'm paid in lieu of notice?

Accepted Answer

Where payment in lieu of notice (PILON) applies, the 'relevant date' for statutory redundancy pay can be pushed by the statutory notice period (1 week per full year of service, up to 12 weeks). This can sometimes push you over another full year of service and increase the payout. Tick the PILON option to apply this.

Question 12

Is redundancy different in Northern Ireland?

Accepted Answer

Yes. The formula is the same but the weekly pay cap and maximum statutory payment are different — in Northern Ireland the cap is £783 and the maximum is £23,490 from 6 April 2026 (versus £751 / £22,530 in Great Britain). Pick 'Northern Ireland' as your region to apply NI rules.

Question 13

What happens if my employer is insolvent?

Accepted Answer

If your employer cannot pay your redundancy pay because they are insolvent, you can claim from the National Insurance Fund (in Great Britain via the Redundancy Payments Service / GOV.UK) or via nidirect in Northern Ireland. The same statutory caps apply.

Question 14

Do fixed-term employees ever qualify?

Accepted Answer

Yes. Fixed-term employees can qualify for statutory redundancy pay where the role is genuinely redundant (not just the contract ending) and they have at least 2 years' continuous service by the relevant date.

Redundancy Pay Calculator

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